Discuss in details the application of accounting principles

Reference no: EM132507345

BAAC2203 Auditing and Control Assignment - Salalah College of Technology, Oman

SECTION I (ANSWER ALL QUESTION) - OPEN- ENDED QUSETION

1. (a) State any five distinguish between internal check and internal control system.

(b) You are working as senior auditor in TCS .Finance Manager sent mail to you about the efficient control system and to give your opinion on internal check and internal control system. Which method would you suggest for the implementation of efficient control system? Justify your answer with supporting information.

SECTION II (ANSWER ALL QUESTIONS) - CASE STUDIES

2. Mr. Salim has started a new business of selling of Handloom items. He purchases these items from a factory situated in Dubai and sells to local customers at a price which give him reasonable amount of pro?t. All gets well in the ?rst year and he earns some income from the business.

He needs more money to expand his business. He decides to ask his friend Mr. Said to invest in the business. Having seen the potential of Mr. Salim business, Mr. Said wants to invest, but neither he wants to manage nor wants to have ultimate liability for the debts of the business in case business fails. He therefore suggested that they should set up a partnership ?rm. He will be the owner of the ?rm and will be entitled to get pro?ts. On the other hand, Mr. Salim, would be the Manager and be paid a salary.

At the end of the ?rst year of trading when Mr. Said receives copy of the ?nancial statements, he ?nds that Pro?ts are much lower than what was expected.

Mr. Said seeks solution for his following problems;

(a) Mr. Said knows that Mr. Salim is paid salary so he may not care for low pro?ts.

(b) Mr. Said is concerned by the level of pro?ts and feels that he wants further assurance on the accounts.

(c) He does not know whether the accounts give a true and fair view of the last year's trading because the pro?ts do not seem as high as those Mr.Salim had predicted when he agreed to invest.

Give your opinion and justifiable solutions to above problems and also state essential qualities of a successful auditor.

3. Ahmed has been appointed as auditor of the Z- Max LLC. Mr Ahmed is requested to audit the financial statements for the year 2019. While auditing the books of accounts, it was found that the total amount of cash received from clients is showing in the correct balances in the customers' account but in the cash book shows a less amount of cash received from client. The works of the accountant is not verified by the manager or owner of the business. While auditing the books of accounts, Mr Ahmed not followed the guidelines used by auditor while conducting and writing the audit report .The management requested Mr. Ahmed to finish the audit fast and they are willing to pay more audit fee. The management will only provide limited access to its books of accounts and not provide adequate supporting evidences or documents for verification and authenticity of the transactions.

a. Do you think there was some fraud in the above statements? Justify your answer with supportive data or information.

b. If you are Mr Ahmed, will you accept the audit engagement? Justify your answer with complete details.

c. How such things can be avoided?

d. Mr Ahmed didn't follow the guidelines while auditing the financial statement. Suggest the guidelines to be followed by Z- Max LLC while conducting the audit.

SECTION III (ANSWER ALL QUESTIONS) - APPLICATION QUESTIONS

4. An NGO operating in Muscat had collected large scale donations for Makunu strom victims. The donations so collected were sent to di?erent NGOs operating in Salalah for relief operations. This NGO operating in Muscat has appointed you to audit its accounts for the year in which it collected and remitted donations for Makunu storm victims.

(a) What type of audit programme would you recommend in the above situation?

(b) Draft (Specimen) audit programme for audit of receipts of donations and remittance of the collected amount to di?erent NGOs.

5. Discuss in details the application of accounting principles applied in preparation of the financial statement with suitable examples.

Attachment:- Auditing and Control Assignment File.rar

Reference no: EM132507345

Questions Cloud

Christensen video : Discuss your reaction to his comments about the value of being data driven and the value of "looking through the lens of a theory" to determine company's future

Calculate the company waccs based on book : Assume that you have been hired as a consultant by Whole Foods to estimate the firm's weighted average cost of capital. They have provided you the following inf

Make a direct materials budget for april and may and june : Prepare a direct materials budget for April, May, and June. Ramos Co. provides the sales forecast and production budget for the next four months

How would you prioritize your assessments and activities : How would you prioritize your assessments and activities? How would you describe your critical thinking process and how do you organize and prioritize.

Discuss in details the application of accounting principles : Discuss in details the application of accounting principles applied in preparation of the financial statement with suitable examples

Benchmark interest rate in response to the pandemic : How will this affect the value of the levered firm and the unlevered firm? Explain the effects on each firm separately.

What does the research mean to clinical practice : How do the results fit with previous research in the area? (This may be reflected in the literature review.) What does this research mean to clinical practice?

Prepare direct materials budget for april and may and june : Prepare a direct materials budget for April, May. and June. (Round your intermediate calculations and ?nal answers to the nearest whole dollar amount.)

What is the theoretical value of the right : What is the theoretical value of the right using the rights on case.

User Account

All Pages